2023 was odd and rough as a tech recruiter, and it’s only mid-November.
The year started with legitimate concerns after the significant tech layoffs in Q4 of 2022 and two words in nearly every news article or conversation we had: inflation and recession. As we moved through Q1 of ’23, we noticed continued layoffs across various industries and increased fed interest rates. In the job market, March and April are typically the months we see a lot of changes happening since many people receive annual bonuses at the end of Q1. But things were different this year. The fed rate hike continued to cause directors and executives of the company to hoard cash as it became more expensive. As we moved into Q2, historically the busiest quarter for job changes, we saw job placement numbers decrease. Then, our friends and competitors in the search and staffing industry started layoffs, and many recruiting firms completely folded – there was no end in sight. The talent acquisition function across the U.S. became lean, creating an influx of recruiters. And then a Silicon Valley bank went belly up, and shortly after that, Credit Suisse. Private equity firms are now paused, and the “recession” has become real.
In Q2, if a company hadn’t already gone through a layoff, their spending was cut and projects were put on hold indefinitely. The larger the company, the greater the cut. Pre-Covid, June had always been another busy month for a job change since it’s the first actual summer month – the best time for families to relocate and begin to transfer schools – but we were in our first “real” non-Covid year. We didn’t see consistent historical relocation trends before the pandemic.
Frankly, as we started Q3, July was a vacation month. Every hiring authority, approver, or interviewer took a much-needed vacation or personal time off, and most companies asked what others were doing before making a decision. July was a perfect storm of, in some cases, the first of post-Covid family vacations for some, mixed with nearly an outright pause to catch everyone’s breath as we brace for the rest of Q3 and Q4. We noticed private equity slowly re-enters the market in several sectors with another round of acquisitions as we pushed through Q3. Unfortunately, many recruiting agencies couldn’t weather another lousy quarter, so many recruiting firms, consulting agencies, and talent acquisition organizations shut their doors or implemented more layoffs to cut spending, hoping things would change in Q1 of ’24. September, another historically good month for job movement, was average for many of us in the industry. Things picked up, but after a few weeks, as we entered Q4, things started slowly out of the gate.
The job market is messy, and we’re hearing more anger and exhaustion in the tones of job seekers, talent leaders, and hiring managers alike. Most companies aren’t hiring in waves, strategic roles have become tactical, hiring managers are trying to push two to three positions into one to get the most out of their already slim budget, talent acquisition teams are lean and exhausted, hiring managers are overwhelmed, and job seekers are irritated being “ghosted” or having to spend that of a full-time job to navigate the job market. Oh, and use ChatGPT to find the best way to get their resume to the top of the one thousand applicant list.
Most companies have already determined if any hiring in tech is needed for Q4. While many are hopeful for 2024 to come around the corner, it’s possible we won’t be waking up on January 1st with money flowing like water and big spending plans. We anticipate continued strife in the market, with some companies pushing forward on projects paused or canceled in 2023. Others are already taking Q1 & Q2 of next year to control spending, hoping that something great will happen in Q3 of next year.
So, what do we have to look forward to in 2024? Well, at a macro-level, we’re all well aware of the war in the Middle East and know that 2024 will be what many call a “circus” as we move to the presidential election. If the interest rates don’t come down, money will continue to cost too much, and projects will be prioritized by urgency and need, with revenue-generating projects taking the lead. In tech, we’re seeing less exciting data projects kick-off due to unknown ROI while cybersecurity continues to be at the forefront of most executives. However, let’s be positive! There are several pockets in various industries that are booming. Biotech startups, manufacturing M&As, private equity investments, next-gen tech investments – it will be busy and exhilarating in several spaces. AI will continue to challenge and shape the job market. A new generation is entering the market quickly, and we are all ready for a great year.